Read your profit and loss

Open Reports → Profit and loss. It lists your income and expenses by category for the period you choose, with the same period last year or last month alongside for comparison, and a profit or loss total at the bottom.

Cash or accruals

The bar above the report lets you switch between two ways of counting the same transactions:

• Cash basis. As gov.uk puts it, "you only record income or expenses when you receive money or pay a bill". An invoice you've raised but not yet been paid for doesn't count yet; a bill you've received but not yet paid doesn't either.
• Accruals (traditional accounting). Income and expenses count by the date you invoiced or were billed, whether or not money has moved yet.

Cash is the default for sole traders and most landlords, and it's the basis your Self Assessment return uses; on cash basis the profit and loss report matches your tax estimate for the same tax year, including on the VAT flat rate scheme (below), with the one exception described there.

If you use the VAT flat rate scheme

HMRC expects a flat rate business's accounts to use what customers paid you, VAT included, less the flat rate VAT you owe, as
turnover, and to include the VAT you can't reclaim in your expenses (VAT Notice 733, section 7.8).
The report does the same: your income is your sales less your flat rate percentage of them, the VAT account holds that flat
rate amount (less any VAT you reclaimed on a single purchase of capital goods of £2,000 or more including VAT), and the VAT
on your other purchases is part of what they cost.

Your Self Assessment estimate and quarterly updates use the same rules, for a self-employed business and for a landlord, and the
Properties page follows them too: income is shown after the flat rate VAT and costs include their VAT, except on a single purchase
of capital goods of £2,000 or more including VAT. A charge outside the scope of VAT and the refund of an invoice with CIS deducted
come out the same on the report and in the estimate, to within a penny on an invoice with several lines or VAT rates, except on a CIS
invoice with a credit note you haven't refunded yet, where they can differ by the flat rate percentage of the CIS adjustment (a few
pounds at most). Money you record as received with no invoice carries the VAT rate you choose for it, and on this scheme your flat
rate percentage of it is taken off in the report, your VAT return and the estimate alike. Choose No VAT only for money that is
outside the scope of VAT (a grant, compensation, an overpayment you will refund): it carries none. A loan or money you paid in
yourself isn't income: explain its bank line as Loan or Capital introduced. Money recorded before BusyBee Hub asked for a rate
is listed under Income with no VAT rate on Tax → VAT: until you choose one it is income at its full amount in the report and
the estimate and is in no box of your VAT return.

Disallowed expenses

Some costs (client entertainment is the usual one) are shown separately under Disallowed expenses. They're listed for completeness, so you can see where the money went, but they're left out of your tax figures because HMRC doesn't allow them as a deduction.

Comparing periods and filtering by property

The "Last period" column shows the equivalent period immediately before the one you're looking at, so a full tax year compares against the previous tax year, and a calendar month compares against the month before it.

If you're a landlord, a Property filter appears so you can see one property's income and expenses on their own, and a By property table breaks profit down per property for the period as a whole. The same disallowed-expenses rule applies here too: a cost HMRC doesn't allow (a fine, for example) shows on the property so you can still see it, but it isn't deducted from that property's profit.

Following a figure back to its source

Every category name is a link. Click it to open the general ledger for that category, showing every invoice, bill, expense or bank transaction that makes up the total, each linking on to the document itself.